Facebook Inc (FB) Unveils A Reusable Gift Card

Facebook Inc (NASDAQ:FB), today, unveiled Facebook Gift card, a reusable gift card which can be used at Jamba, Inc. (NASDAQ:JMBA), Olive Garden, Sephora, and Target Corporation (NYSE:TGT). The Gift Card is a crucial step for Facebook to diversify it’s revenue stream and make a move towards e-commerce.

Gift cards are fairly easy to deal with, the user only has to select one of the four retailers and mention the amount. The rest of the process is managed by Facebook. The person to whom the card is sent receives a physical Facebook Card, via snail mail. The value in the card refreshes on any further Gift card sent by a Facebook friend to him or her. The card amount can be separated for each of the retailers. And each balance must be used for the specified retailer, meaning a user can’t pool the funds and spend the whole amount on any one retailer.

Explaining the feature, the blog from Facebook Inc (NASDAQ:FB) read “Your card can hold multiple gift balances, and each balance is dedicated to the retailer associated with the gift. For example, you might have gift balances of $100 at Sephora, $75 at Target Corporation (NYSE:TGT), $50 at Olive Garden, and $8.25 at Jamba, Inc. (NASDAQ:JMBA).”

The Gift card is accessible through the “Gift Cards and Digital” category within Facebook Gift, and can be bought and sent by the Facebook users to their other friends on the social networking site.

“We’re starting this early rollout as another way for people to instantly send their friends gifts through Facebook,” a company spokesperson told CNET. “Each gift is a set value at a particular retailer, chosen by the sender.”

The new feature from Facebook Inc (NASDAQ:FB) is an extension of the Gifts product launched before the holidays for its US users, which is still in the developing stage. The revenue from the Gifts feature is very minimal as of now, and was clubbed in the “other revenue” category that recorded about $5 million in revenue for the fourth quarter.

“This past quarter, payments and other revenue also included around $5 million from sources outside of games, primarily user promoter posts and to a lesser extent from our new Gifts product,” CFO, David Ebersman said.

The Card holder’s will get the notifications of an incoming digital gift and can check their balances on Facebook Inc (NASDAQ:FB). The Gift card feature will be available to U.S. users gradually. Facebook has not revealed the terms of the deal with the participating retailers.

Author: Aman JainAman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com